Fargo utility rates will increase, but one commissioner questions why

FARGO — Water and sewage fees are going up 3 percent after city leaders here voted Tuesday night, Jan. 2, to increase rates as part of a long-term plan to fund city utilities.

For the average homeowner, that means paying an additional 96 cents a month, or $11.52 a year, Water Utility Director Troy Hall told the City Commission.

The minimum cost of water for a home with a three-quarter-inch pipe, for example, will increase from $17.05 to $17.55 a month. The flat rate for residential sewage service will increase from $16 to $16.50.

The last time the city changed utility rates was 2014, when rates were cut 15 percent, said Wastewater Utility Director Jim Hausauer.

Commissioner Tony Gehrig was the lone dissenter in the 4-1 vote. He said the city is expanding service to neighboring communities, investing significantly as a result, and he expects that with more paying customers, rates should go down, not up, for Fargo property owners.

Gehrig said the city diverts 20 percent of utility fees to the general fund, so it seems to him the real goal of the fee increases is to send more money to that fund.

The general fund pays for the city's day-to-day operations and relies largely on property taxes.

Commissioner Tony Grindberg said he thinks the city should consider ways to use utility fees to reduce reliance on property taxes, asking city staff to consider doing so in the 2019 budget.

Mayor Tim Mahoney said the 20 percent diversion is allowed by state law and many cities take advantage of it. He said the rate increases are for long-term needs.

Recently, city leaders agreed to have staff begin planning to upgrade the sewage plant to double capacity to serve a larger regional population. The estimated cost of the four-year project is $125 million.